Comments on:

Julio Guzman, IDB: “Trade and Poverty in Latin America: What Do We Know?”

Marcelo Lafleur, UN ECLAC: “First-Order Effects of Liberalization on Real Wages: Chile”

Daniel Lederman, World Bank: “Who Suffers the Burden of Adjustment? Returns to Schooling and Business Cycles in Latin America”

Oscar LanderretcheUniversidad de Chile

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

Asks …

¿Why is support for trade liberalization falling?

and answers, cos …

The effects of trade liberalization (really of TLCs) has been heterogeneous in sectors and regions…

… maybe related to heterogeneous and high transport costs…

… falta hardware.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

Sez …

Moreover, it seems pretty clear that it has been welfare improving for households in Chile…

… especially the poorest …

… so ¿what's the problem?

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

Was this done on purpose?

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

Was this done on purpose?

First I'll make (very few) comments on each…

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

Was this done on purpose?

First I'll make (very few) comments on each…

…then about the argument

Asks …

¿Why is support for trade liberalization falling?

and answers, cos …

The effects of trade liberalization (really of TLCs) has been heterogeneous in sectors and regions…

… maybe related to heterogeneous and high transport costs…

… falta hardware.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

1

Asks …

¿Why is support for trade liberalization falling?

and answers, cos …

The effects of trade liberalization (really of TLCs) has been heterogeneous in sectors and regions…

… maybe related to heterogeneous and high transport costs…

… falta hardware.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HEREI’m sympathetic to the preoccupation that inspires the question…

..but I’m not sure it is supported by the data.

1

Asks …

¿Why is support for trade liberalization falling?

and answers, cos …

The effects of trade liberalization (really of TLCs) has been heterogeneous in sectors and regions…

… maybe related to heterogeneous and high transport costs…

… falta hardware.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HEREI’m sympathetic to the preoccupation that inspires the question…

..but I’m not sure it is supported by the data.

1

Asks …

¿Why is support for trade liberalization falling?

and answers, cos …

The effects of trade liberalization (really of TLCs) has been heterogeneous in sectors and regions…

… maybe related to heterogeneous and high transport costs…

… falta hardware.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HEREI’m sympathetic to the preoccupation that inspires the question…

..but I’m not sure it is supported by the data.

Boy is this soft! 1

Asks …

¿Why is support for trade liberalization falling?

and answers, cos …

The effects of trade liberalization (really of TLCs) has been heterogeneous in sectors and regions…

… maybe related to heterogeneous and high transport costs…

… falta hardware.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HEREI’m sympathetic to the preoccupation that inspires the question…

..but I’m not sure it is supported by the data.

Boy is this soft!

… so if we are actually worried about this maybe we should get better data.

1

Asks …

¿Why is support for trade liberalization falling?

and answers, cos …

The effects of trade liberalization (really of TLCs) has been heterogeneous in sectors and regions…

… maybe related to heterogeneous and high transport costs…

… falta hardware.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

2

Asks …

¿Why is support for trade liberalization falling?

and answers, cos …

The effects of trade liberalization (really of TLCs) has been heterogeneous in sectors and regions…

… maybe related to heterogeneous and high transport costs…

… falta hardware.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

2

Heterogeneous results are not a demonstration of bad net effect.

There are supposed to be winners and looser (regions and sectors)… … but a social distribution system that helps the loosing individuals to get back on their feet.

Asks …

¿Why is support for trade liberalization falling?

and answers, cos …

The effects of trade liberalization (really of TLCs) has been heterogeneous in sectors and regions…

… maybe related to heterogeneous and high transport costs…

… falta hardware.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

2

Heterogeneous results are not a demonstration of bad net effect.

There are supposed to be winners and looser (regions and sectors)… … but a social distribution system that helps the loosing individuals to get back on their feet.

Maybe that’s what is failing around here.

Asks …

¿Why is support for trade liberalization falling?

and answers, cos …

The effects of trade liberalization (really of TLCs) has been heterogeneous in sectors and regions…

… maybe related to heterogeneous and high transport costs…

… falta hardware.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

3

Asks …

¿Why is support for trade liberalization falling?

and answers, cos …

The effects of trade liberalization (really of TLCs) has been heterogeneous in sectors and regions…

… maybe related to heterogeneous and high transport costs…

… falta hardware.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

3

¿Are we seriously thinking that we can keep this going on infrastructure?

I’m all for infrastructure, sure, but…

… ¿what about inequality, mobility meritocracy, competition, innovation, new entrepreneurship, all that stuff?…

¿Riding the commodity bubble are we not?

Sez …

Moreover, it seems pretty clear that it has been welfare improving for households in Chile…

… especially the poorest …

… so ¿what's the problem?

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

1

I liked the paper.

One would be tempted to claim a paradox with previous presentation…

… but there is no paradox, for the costs of liberalization are not being estimated …

…¿what period? Are they talking about liberalization or bilateral trade agreements, its different…

… estimations ate for an already (very) open country, very specialized, with no local market.

Sez …

Moreover, it seems pretty clear that it has been welfare improving for households in Chile…

… especially the poorest …

… so ¿what's the problem?

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

1

I liked the paper.

One would be tempted to claim a paradox with previous presentation…

… but there is no paradox, for the costs of liberalization are not being estimated …

…¿what period? Are they talking about liberalization or bilateral trade agreements, its different…

… estimations ate for an already (very) open country, very specialized, with no local market.

But in creative destruction, both parts are important…

… no estimation of destruction…

… which would be reflected, for example, in volatility of wages…

… volatility of income and…

… probability of unemployment …

… wealth effect on loosers.

Sez …

Moreover, it seems pretty clear that it has been welfare improving for households in Chile…

… especially the poorest …

… so ¿what's the problem?

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

1

I liked the paper.

One would be tempted to claim a paradox with previous presentation…

… but there is no paradox, for the costs of liberalization are not being estimated …

…¿what period? Are they talking about liberalization or bilateral trade agreements, its different…

… estimations ate for an already (very) open country, very specialized, with no local market.

It can be done…

…its hard for this period.

But in creative destruction, both parts are important…

… no estimation of destruction…

… which would be reflected, for example, in volatility of wages…

… volatility of income and…

… probability of unemployment …

… wealth effect on loosers.

Sez …

Moreover, it seems pretty clear that it has been welfare improving for households in Chile…

… especially the poorest …

… so ¿what's the problem?

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

2

Sez …

Moreover, it seems pretty clear that it has been welfare improving for households in Chile…

… especially the poorest …

… so ¿what's the problem?

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

2

Also…

¿What is the counterfactual?

It can't be that prices do not fall…

… maybe we are being to benevolent.

This is scary if some results are small.

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

1

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

1

I have a really hard time seeing the empirical regularities claimed by the paper.

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

1

I have a really hard time seeing the empirical regularities claimed by the paper.

I lean your way but having Brazil, Chile and Venezuela as exceptions is not a small thing.

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

2

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

2

These results are pretty cool…

... but maybe to heterogeneous.

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

3

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

3

Maybe this is not such a big surprise…

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

3

Maybe this is not such a big surprise…

…so, ¿why not control for degree of openness? …

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

3

Maybe this is not such a big surprise…

…so, ¿why not control for degree of openness? …

…¿and industrial structure?

Bah Sez Lederman …

…what you guys don’t get is that its about risk…

… not (only) level…

… RTS has become more volatile …

… cos it changes in the cycle…

…and the cylce is mainly imported from abroad in open and specialized economies.

… education has become more risk, which is a big deal.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

3

Maybe this is not such a big surprise…

…so, ¿why not control for degree of openness? …

…¿and industrial structure?

I think this paper opens a lot of questions and a big agenda…

… which is great.

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

So…

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

So…

…I’m not completely convinced about this problem …

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

So…

…I’m not completely convinced about this problem …

…I’m convinced about his argument although I recognize the need for more work on the empirical evidence …

Guzman Lafleur Lederman

THERE ACTUALLY SEEMS TO BE AN ARGUMENT HERE

So…

…I’m not completely convinced about this problem …

…I’m convinced about his argument although I recognize the need for more work on the empirical evidence …

…I sort of think these guys could look at risk-ish variables…

… but would have to change period.

It was funThanks!